Southwest cancellations will rise due to grounded Boeing jet

Southwest cancellations will rise due to grounded Boeing jet

Boeing has said it faces a financial hit over the 737 Max crisis of some $6.6 billion, fueling profitability pressures. Nothing is more important to us than the safety of the flight crews and passengers who fly on our airplanes. Grounded In the wake of the crashes of two different 737 Max models, which lead to more than 400 deaths, Boeing had to take the plane out of the air and halt production of the popular model, which may not fly again this year.

The Calgary-based airline announced in late June that it is now scheduling without the Max 8 - grounded globally in March following two fatal crashes - until August 29, as opposed to the previously stated July 3.

"The financial impact recognized this quarter reflects the current challenges".

In Boeing's "best estimation", the earliest date when MAX could return to service is the "early" fourth quarter of 2019, depending on regulatory approval.

Boeing's stock price closed down 2% before the news, but gained 2% in after-hours trading, to $369, by 5 p.m.in NY.

Without the plane, Southwest says it will drop about 180 flights a day from its schedule, up from 150.

"I have to think they are far enough along in the process that they feel they understand everything the FAA needs", he said, referring to the Federal Aviation Administration.

Boeing's calculations also assume that monthly production of its 737 jetliners will gradually build to a 57-month rate next year, earlier than some analysts have estimated.

WestJet CEO Ed Sims told reporters in May following the company's annual general meeting that the work now being done by Boeing and regulators around the world provides a "clear line of sight" to the eventual lifting of the grounding order.

However, in a speech on Thursday, the United States transportation secretary appeared less certain that the aircraft would be cleared to fly again this year. Analysts are saying this charge will wipe out Boeing's profits for the quarter.

But the fuller picture of how much the grounding will cost Boeing, and how it plans to fix its image with the flying public, was not expected until the end of the second quarter since 737 production cuts did not begin until mid-April. Company engineers are still working on an update. The plane's return, however, has been pushed back several times, most recently after FAA pilots found a new flaw while testing Boeing software changes in a flight simulator. Boeing plans to gradually step up production once the Max returns to service to ensure that its supply chain isn't unduly stressed.

WestJet, which owns 13 Boeing Max planes, accounting for seven per cent of its fleet, is just one of many airlines around the world struggling to re-accommodate guests in light of the ongoing grounding of the plane.

This story has been published from a wire agency feed without modifications to the text.

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